Section 9006 program rural energy efficiency renewable energy projects may 9 2008
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Section 9006 Program : Rural Energy Efficiency Renewable Energy Projects May 9, 2008. Alan L. Watt Rural Energy Coordinator [email protected].gov Gary Mack Business & Cooperatives Program Director [email protected] Outline.

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Section 9006 program rural energy efficiency renewable energy projects may 9 2008

Section 9006 Program:Rural Energy Efficiency Renewable Energy ProjectsMay 9, 2008

Alan L. Watt

Rural Energy Coordinator

[email protected]

Gary Mack

Business & Cooperatives Program Director

[email protected]


  • What is the USDA Section 9006 Loan and Grant Program?

  • Who are eligible applicants?

  • What are eligible projects?

  • Project Opportunities

    • Examples of Arizona Projects

    • 2007 Farm Bill, Section 9008 R&D

  • Guaranteed Loan Program

  • Web Site

What is the section 9006 program
What is the Section 9006 Program?

  • Renewable Energy and Energy Efficiency Loans and Grants under the U.S. Department of Agriculture

  • Program designed to assist farmers, ranchers and rural small businesses with energy projects

  • CFR 4280 published in July 2005 provides for renewable energy grants and loan guarantees

  • Congress has funded the program at $22.8 million per year for the first four years.

  • The 2007 Farm Bill is anticipated to significantly raise funding levels for renewable projects.

Who is eligible
Who is Eligible?

  • Rural small businesses and agricultural producers can apply

    • Rural – Any area other than a city or town with population over 50,000. Cannot be in urbanized area adjacent to such a city or town.

    • Agricultural Producer -- An individual or entity directly engaged in the production of agricultural products (including farming or ranching) that gets 50% + of their gross income from the operations

* Also see the NOFA published in the Federal Register 2/13/2006

Who is eligible1
Who is Eligible?

  • Small Business – Must meet Small Business Administration (SBA) small business size standards. Must be either:

    • A private entity including a sole proprietorship, partnership, corporation, cooperative (including a cooperative qualified under section 501(c)(12) of the Internal Revenue Code), or

    • An electric utility that provides service to rural consumers on a cost-of-service basis. Must be independent of government control or public funds.


    • Non-profits are excluded.

  • Applicant must demonstrate financial need

  • Rural small business must be located in a rural area.

  • Applicant must meet citizenship/legal status requirements.

What projects are eligible
What Projects are Eligible?

  • Renewable energy and energy efficiency projects

  • Requirements for eligible projects:

    • Must be located in a rural area

    • Must be for a pre-commercial or commercially available and replicable technology

    • Must be technically feasible

    • Must have sufficiency revenues to provide for operation and maintenance

    • Energy Efficiency limited to existing buildings

  • The applicant must be the owner of the project and control the operation and maintenance of the proposed project.

What projects are eligible1
What Projects are Eligible?

  • Grants request can be up to 25% of project costs

    • Minimum grant request: $2,500

    • Renewable Energy:

      • Maximum grant request: $500,000

    • Energy Efficiency

      • Maximum grant request: $250,000

Renewable energy examples
Renewable Energy Examples

  • Renewable Energy – energy derived from:

    • wind, solar, biomass, or geothermal source, or

    • hydrogen derived from biomass or water using one of the above

  • Biomass – any organic material that is available on a renewable or recurring basis. Includes:

    • agricultural crops

    • trees grown for energy production

    • wood waste and wood residues

    • plants (including aquatic plants and grasses)

    • residues

    • fibers

    • animal wastes, and

    • fats, oils and greases (including those that are recycled).

Sample projects by technology
Sample Projects by Technology

  • Energy Efficiency

    • Lighting, HVAC, refrigeration, insulation, motors (large)

      • Enormous opportunity for small businesses

  • Small wind

    • Farm-power, water pumping (large)

  • Geothermal

    • Direct use (limited)

    • Ground source heat pumps (large)

  • Solar

    • Farm-power, water pumping, system monitoring/control

      Example: Snowflake White Mountain Power:

  • 25 megawatt biomass electric generation from the 450,000 acre Rodeo-Chedeski forest fire

Guaranteed loan program basic guidelines
Guaranteed Loan Program – Basic Guidelines

Two different application packages to provide financial assistance to purchase and install renewable energy systems in rural areas:

  • There is an application package for loans greater than $600,000 and one for loans< $600,000 (Simplified Application Process)

  • Can have a combo guaranteed loan and grant up to 10 million;

    Percentage of Guarantee to the bank or investor:

  • 85% for loans of $600,000 or less;

  • 80% for loan greater than $600,000 up to and including $5 million;

  • 70% for loan greater than $5 million up to and including $10 million.

  • The fee charged by the Agency is 1% multiplied by the percent of guarantee multiplied by the loan amount.

Guaranteed program how to start
Guaranteed Program – How to start

  • An eligible business or agricultural producer must find a lender interested in renewable energy and/or energy efficiency projects;

  • Technical report completed for the specific type of RE system and/or a business level feasibility study may be required;

  • The applicant and the lender should contact Rural Development to discuss program requirements early in the application process;

  • All RE applications are reviewed by the National Renewable Energy Laboratory (NREL)


  • Program Overview

  • Solicitation

  • State USDA Contacts

  • Application Forms

  • Tools and Resources

    • Sample Application

    • Technical Guidance

    • Outreach Materials